Greek Shipping News Cuts
Week 23 - 2005


Shipowners get new EU rules

---Greek shipowners have convinced EU authorities to adopt a set of more rational measures about the criminal liability of shipowners and crews in case of accidents.
The Union of Greek Shipowners (UGS), which recently visited Brussels, said EU officials confirmed there will not be a repeat of cases such as that of Apostolos Mangouras, the captain of the Prestige tanker who was held in detention for a long time without trial.
Brussels officials and the UGS delegation worked through several new measures. The most significant of these was the revised "Lisbon Agenda," in which EU Commission President Jose Manuel Barroso committed himself to making Europe "one of the most attractive destinations for investment and work." Shipowners say that "in order for the competitiveness pillar to be strengthened, the development of business culture is required not just by company officials but also by lawmakers."
The "new type of governance" offered by European Maritime Affairs Commissioner Joe Borg must view European shipping optimistically and improve its image so that it proportionately reflects progress and development in Europe.
If the EU wants to become a more competitive market in the world, Greek shipowners said "it must fight the war against hostile behavior developing in the European area through mass media representations of maritime environment pollution incidents" and the consequent prejudice governments show through lawmaking.
"The joint response by a rare and solid coalition of maritime and shipping organizations and corporations is indicative of the great displeasure covering all shipping activities in Europe about the criminalization of accidental sea pollution," the same UGS sources claimed. "Yet this displeasure has been completely ignored by the EU's competent authorities."
Greek shipowners say if Europe were to lose its investors and seafarers, it would eventually lose all of its shipping activities. If community fleets abandon their EU-member flags, then shipping know-how would disappear and a great number of jobs would be lost.
"Domestic shipowners, as well as Barroso, believe that the EU's future is indispensably linked with an imposing presence at sea," UGS sources said.
Source: By Nikos Bardounias - Kathimerini, 7 Jun 2005

Family company culture alive and well in Greek shipping
---Family companies will continue to play a prominent role in the shipping industry despite the pressures of more stringent regulations and the trend towards consolidation, the Oslo Shipping Forum was told.
Emmanuel Papalexis, managing director of Mare International, said that although the merits of growth were understood the family-run business could still have its day.
He noted that Greece had the largest number of family-run shipping companies.
"Probably there is no other place where one can find such a fragmented and family-oriented shipping community," he added. However, Greek shipping companies had not ignored the trend towards consolidation.
Between 1998 and 2004 the number of shipping companies fell to 733 from 926 although the fleet grew to 180.1m dwt from 133.6m dwt.
Even so, 64% of the Greek shipping companies controlled five vessels or fewer.
"These figures highlight that Greek shipping continues its fragmented profile, with a pre-dominance of smaller companies making up its backbone," Mr Papalexis said.
"While precise information on the exact nature of the corporate structure of these companies is not available, undoubtedly the great majority of these companies are family businesses."
The Greek shipping "empire" was built on this concept, he pointed out, and it was "very much in existence" today.
But he stressed that a conscious commitment towards quality must be made for the small size of the family-run company not to constitute an obstacle to complying with regulations.
"The only certain fact is that today a shipping enterprise which elects to remain small will only preserve its future prosperity if it stands out with respect to superior quality," Mr Papalexis said.
"The days of substandard operations are rapidly coming to an end."
The attention of the shipping industry was firmly focused on the quality of the ship, its manager and its crew and this trend was expected to intensify.
Mr Papalexis concluded: "It goes without saying that many large family shipping companies will continue their operations using the same successful formula of the past, since they have available all the resources they need to provide safe and efficient transport of cargoes."
The conference was also told that forward freight agreements were now an established feature of the ship-ping industry and a market which could "flourish without the direct participation of shipowners".
Basil Mavroleon, managing director of Charles R Weber, told delegates: "It is safe to conclude that FFAs are here to stay and that a significant growth period is to be enjoyed over the next five years."
He said the involvement of large energy entities suggested that the FFA market would follow the template of the mature energy markets such as oil and gas.
"The market will not be dependent on shipowners becoming involved," he warned. "Its evolution will, however, have a growing impact on the underlying freight market."
Source: By Tony Gray in Oslo- Wednesday June 08 2005

Tankers add sheen to Greek fleet\'s profile
---With energy carrying ships leading the way, the average age of the Greek-controlled fleet is now just over 15 years. But the average of the crude carrying fleet is 9.8 years, in line with the world average of 9.5 years for tankers and is getting younger.
Of the just on 400 ships now contracted by Greek interests to the world's shipyards, over 120 are oil tankers set to be delivered between now and early 2008. In addition, 80 product carriers are on order, 32 chemical tankers, 17 gas carrying ships and number specially designed ships for the bunker market.
With the investment by Greek companies in newbuildings estimated to be a massive $13bn, brokers in Piraeus report the number of product and chemical tankers is set to rise further, as some 30 ships are held as options or are being negotiated. Many of these will enter niche trades in the Med region, some replacing ships now being phased out.
Age of the Greek-flag tanker fleet is even more impressive than for the fleet as a whole, being a very youthful 6.1 years in ship terms and 5.3 years in terms of deadweight. With many of the ships under construction earmarked for the home flag the age profile will drop further.
Age of the world fleet is also coming down but the Greeks are ahead of the average and getting further ahead. According to a report by the London-based Greek Shipping Co-operation Committee, as a whole, average age of the Greek-flag fleet is now 11.6 years, over one year younger than at spring 2004. Average age in gross tonne terms is 7.1 years, against 7.6 years in 2004 and 6.5 years in deadweight terms, down from 7.1 years a year ago.
Many of the ships delivering to Greek interests are high spec, with the Tsakos Group, Minerva Marine and Liquimar Tankers among owners building large ice-class ships. Further, a number are turning to gas -- Angelicoussis, Latsis, Procopiou, Tsakos -- investing heavily in LNG tonnage, a new market for Greeks. As these high cost vessels begin to deliver some of them have yet to be fixed.
The GSCC study reveals Greeks presently control 23.2% of the world's oil tanker fleet and 21.1% of the world's carrying capacity. In addition, they control 8.2% of the chemical and products tankers and 13% of the deadweight.
As well, in the first five months of 2005, over $1.5bn has been invested in purchasing 58 secondhand energy ships of just under 3m dwt. Average age of the ships bought was 12.8 years, and the average investment was around $24m a ship.
As sellers, Greeks have disposed of some 110 energy ships, including the Stelmar fleet, raising $1.7bn. Leaving the Stelmar sale to OSG aside, 67 tankers of various types have been sold of an average age of 15 years and an average price of a little in excess of $15m a ship.
With much of the discussion at April's Athens Intertanko event and this week's Nor Shipping in Oslo centering on quality, the fleet renewal should place Greek operators in a good position. BP Shipping ceo Bob Malone told the Nor Shipping conference he shortly meeting with ceos from leading tanker companies in London to discuss ways of improving the quality of t/c tonnage.
He said: "We are looking for a higher environmental compliance and safety when we go to the market. We need to find quality tonnage to protect the BP group" which is the world's second largest oil major.
.Malone said 42% of BP's fleet was now made up of controlled ships consisting of owned and t/c ships. Following delivery of 50 more newbuildings he said the ratio was set to rise to more than half the BP fleet. Malone did admit BP could also learn from its t/c suppliers on how to operate tankers. "In some ways we may have fallen behind," he said.
Intertanko chairman Stephen Van Dyck warned Nor-Shipping "the industry is only as good as its last accident". He said there is a growing recognition among tanker owners that their customers are not just the oil companies but people filling up their vehicles at gas stations and at home using electricity. They are people who determine what image and respect the industry enjoys. The tanker industry needs to move forward and be aware of those affected by its activities, he said.
-- Filed: 2005-06-09

Money for nothin', cheques for free
Owners, financiers and lawyers go ape over shipping loan terms - with good reason. Loan details reveal much about a key power struggle between borrowers and lenders
Bankers have surrendered all power - and all pretence of power - to borrowers in today's booming shipping market, maritime finance leaders tell Fairplay. So desperate are lenders for business that margins and fees have been driven down. Bankers have even eased their usual insistence on standard covenants. And short sellers have dampened publicly traded tanker stocks, wagering that shares will keep falling on increased capacity and moderating oil demand from the US and China (Fairplay Daily News, 1 June). "It's not only pricing, it's also about relaxed terms. Loan agreements are negotiated at depth and points are given that in the past were not given," one Greek banker suggests. On pricing, the key term in all bilateral loans, margins and fees has evaporated so much that one financier declares to Fairplay: "Today we can say that shipfinance has become a high-risk, low-return activity." It is difficult to say just how much margins have dropped, because shipfinance presents a very diverse profile: borrowers come in different sizes, shapes and nationality, each of them pointing to a unique credit risk. However, Andonis Zolotas of Eurofin, the Athens-based corporate finance house, provides a stark illustration: "The drop has been dramatic. We did a deal last fall at 1.05%. The same client asked for 0.8% six months later and, effectively, he got it. It is 25 basis points difference in six months."
What you are is what you get
Even though views vary, it is clear that what you get greatly depends on who you are. Top-quality corporate owners are picking up good deals for tiny amounts, about 60 basis points (60% of one per cent) on their loans; medium owners are paying about one per cent. Worse, according to Bote de Vries, head of investment management at DVB Bank, "real small owners are off the screen". One London-based lawyer adds: "I've seen some owners in less attractive jurisdictions having to pay as much as 4.5% over Libor. It certainly makes it more expensive." Margins and fees have dropped because of increased banking competition, higher owner liquidity and greater credit-worthiness among other reasons (see box, p16). Whatever the causes, for bankers the consequences are dire. Bank profitability is in freefall, by about 20-30%. "Banks in shipping today are eroding their capital with this pricing," the Greek banking source points out. Lenders are pressured by borrowers on other fronts as well. With today's staggering newbuilding prices, a potential nightmare is building. Bankers are trying to push for lower loan-to-value ratios (see box, below), but owners know that they can just go elsewhere if banks refuse to play ball. So, although the loan-to-value (LTV) ratio still lies at about 70-75%, just as a few years ago, in absolute terms the bank is actually lending more money than ever before. That is great for the owner because it makes his money go further, both in terms of buying more vessels and producing better investment returns. But the bank must assume more risk. And bankers hate risk even more than they hate lawyers. Allied to the LTV issue is the 'debt-cover', 'fair market' or 'minimum value' clause, as it is variously known. This allows a bank to ask for further security if the market value of a vessel falls beneath a certain level. This factor is now both at a lower level and more flexible than in recent years. Some banks will wait until the ship is worth the same the loan before demanding more security "I see 100% to 120%, when in the past it was 120% to 150%," says de Vries, who adds: "It's not a problem until the downturn kicks in."
But banks are not totally helpless
Banks, although now almost without power, are not totally helpless. Lenders have been pushing for front-loaded repayment schedules. "Bearing in mind that prices have doubled in the past year, this does represent a relatively high risk to lenders. Yet they are offsetting this by front-loaded accelerated repayment schedules," comments Ted Petropoulos, MD of financial consultancy Petrofin. "It protects banks in case there is a drop in the markets. That is a factor for sure," says David Baker, a shipfinance specialist and partner with law firm Ince. Such front-loading is not to the borrower's taste. Owners normally push for loans with a long life-span and a high balloon (a large final lump-sum payment). The longer the profile of the loan and the longer owners can delay payments, the better the rate of return on the owner's equity. But banks clearly want none of that. However, in the current market - with its stellar asset prices, pathetic margins and an almost complete surrender on other terms and conditions - it is clear why de Vries foresees a lot of bad debt: "The current deals of today will be the workouts of tomorrow".
Why worry when you've got ...
... suicidal Greeks ... "Today is the market that I don't believe in. If we are expanding and the market crashes, we are going to kill ourselves." - A senior, anonymous Greek banker
...merciless shipowners ...
"Banks are at the mercy of the shipowners." [Fairplay: Are shipowners merciful?] "No, no, no way. Shipowners have never been merciful. Why should they be now?" - Andonis Zolotas, Eurofin
... fighting bankers ...
"For me it is almost unbelievable that the banks are fighting for deals when the risk is the highest and the spreads are the lowest." - Bote de Vries, DVB Bank's investment manager
... and falling markets?
The shift in financial covenants hasn't been so high, so if [the market falls] there will be bigger things to worry about." - London-based lawyer
"Banks are very cautious at the moment because they are wary of market correction. And not unduly." - Ted Petropoulos, Petrofin founder
"The conundrum: Are we going to return after this bullish market down to the long-term historical averages or are we going to keep a percentage of the value rise and higher earnings of the vessels in the next phase of the cycle?" - Petropoulos again
How LTV works in shipping deals
LTV OR LOAN-to-value refers to the amount of finance that a bank will lend to an owner for a newbuild or a second-hand vessel. It is calculated as a percentage of the vessel's value at the time of contract. So five years ago, say, a standard 300,000dwt VLCC with capacity of about 2M bbls of oil cost about $74M. With an LTV of 65%, the bank would have stumped up about $48M. However, prices have shot up in recent years. The same VLCC is now worth $135M. With 65% financing, the loan is now $84.5M - nearly twice the amount provided back in 2000. "The 65% on paper appears OK, but the loan in absolute terms is very high," says one senior banker in the Greek market. So in today's market, although the LTV is not abnormal, the pricing is. This means that the bank is over-financing compared with historical prices. That is particularly important when the market is at historical highs.
Source: ---Fairplay International Shipping Weekly 9 Jun 2005

Salvage crew ready to haul log-ship off rocks today
---EAST LONDON - The salvage team working on the stricken bulk carrier Kiperousa, which went aground off Hamburg on Tuesday, is hoping to be able to refloat the vessel later today, Captain Peter Kroon of the South African Maritime Safety Association said last night.
A tug, the Nikolay Chicker, which left Cape Town for the Maltese-registered freighter on Tuesday is due to rendezvous with the Kiperousa before dawn today.
"The salvage team is expected to board the Kiperousa at first light and start rigging a tow-line so the tug can pull it out on the high tide in the afternoon," Kroon said.
The salvage team went out to the vessel yesterday and held a meeting to discuss what the best course of action would be.
"Things look promising and we are quite confident that the ship can be towed out," Kroon said.
"None of the holds have taken water and it is only the engine-room that is flooded so we are optimistic."
He added that there was no one aboard the vessel last night as there was no power and the ship was "completely blacked out".
Eighteen of the 24 crew who were taken off the ship on Tuesday night, arrived in East London yesterday aboard the SA Navy survey ship, the SAS Protea.
The other six crew remained aboard the tug Mpunzi which docked around 9.30am yesterday.
The captain and crew were accommodated at a beachfront hotel and they are at this stage uncertain as to what will will happen to them.
The ship's local agent John Fish said he was not able to give any information to the media.
Salvage tug the Pentow Service passed off East London yesterday afternoon on its way down the coast.
Kroon said he had heard about the salvage tug but had no idea what it was doing in the area as arrangements had been made with the Nikolay Chicker.
"They might be waiting around for salvage possibilities," he said.
Kroon said the seas yesterday and last night were rough and high but he expected them to calm later today.
"Usually after a front like this the seas calm down and we should be able to get on with the operation.
"The vessel has lifted itself off the rock and was no longer listing. "It is now level."
The Kiperousa, with a cargo of logs destined for the Far East, was heading for Durban to take on bunker oil which meant its fuel tanks were not likely to have been full, National Ports Authority spokesman Terry Taylor said yesterday.
"There is about 300 tons of mixed oil, diesel and heavy oil, which in maritime terms is not a lot," Kroon said, adding that a small quantity had leaked out "but the seas have done a god job of dispersing it".
If the Kiperousa could not be towed then the next priority would be to remove the oil from the vessel and plans had been made for that Kroon said.
The 15000 ton Kiperousa is owned by Swan Marine based in Piraeus, Greece.
The 160m long vessel was built in 1984 and in this time has operated under the names Nicolas Star, Samsun Unity and Oriental Honey.
Meanwhile, an air of despair hung over the city hotel where rescued sailors are staying while the fate of the beleaguered ship is being decided by the authorities.
Only Sealink Marine superintendent engineer Dimitris Pektasoglou was willing to speak to the press openly, and then only about the sailors themselves.
"I'm just happy that the crew had no injuries," he said in broken English.
Two of them spoke of their experience, on condition that their names were withheld.
They said everything happened so quickly there was no time to panic.
Another sailor, dressed in bright orange overalls, pored over a copy of the Dispatch. He seemed fascinated by the page one picture of the ship that was his home and source of livelihood for five months.
Source: Dispatch Online, South Africa - Jun 8, 2005 Lew Elias and Taralyn Bro

Minoan Lines reduces losses
Although Q1:05 is characterized by significant fuel cost price increase, improved performance was supported by traffic increases in Piraeus-Crete and Greece-Italy routes.
Indicatively, passengers carried in the respective routes stood at 166,000 (+3%) and 60,000 (+7.1%).
Management appears optimistic in achieving FY:05 targets, based on Q1:05 results and its systematic efforts for cost reduction
However analysts note that the first quarter is not significant for Minoan Lines and passenger shipping sector in general, since the bulk of sales is realized in second and third quarter.
Source: (subscription), Greece - Jun 8, 2005

Oil pipeline joint venture
---SEVEN companies from Bulgaria, Greece and Russia have agreed to form a joint venture to build the Bourgas-Alexandroupolis oil pipeline that will take Russian oil from the Caspian to the Aegean Sea.
"The companies interested in the project signed a memorandum to discuss within the next six months their stakes in a joint-venture International Project Company (IPC) to build the pipeline," Kalin Rogachev told a news conference on May 27 after the end of the three-day talks in Sofia. Rogachev is head of the office of Regional Development and Public Works Minister Valentin Tserovski.
"During that time other partners are also more than welcome to join," Rogachev said.
Four Russian companies - TNK-British Petroleum, Stroytransgas, Sovcomflot and Tatneft - will join the project.
Three others - Sibneft, Surgutneftegas and Rosneft - were still discussing their financial engagement in the deal, said Anatoly Yanovsky, Director of Fuel and Energy Complex Department of Russia's ministry of industry and energy.
The three Greek candidates for participation, Hellenic Petrol, Latsis Group, and Prometheus Gas have already formed a consortium called DEP-Traki, Greek deputy development minister George Salagoudis said.
Two more consortiums - Universal Terminal Bourgas and Transbalkan Pipeline Company - are to join the deal on the Bulgarian side.
Bulgaria, Greece and Russia in April signed the political accord on the 700 million euro deal to build the 285-km pipeline linking the Bulgarian Black Sea port of Bourgas, and Alexandroupolis in the far northeast of Greece.
It will allow Russian oil from the Caspian Sea to be transported from the port of Novorossiisk on the Black Sea by tankers to Bourgas and to reach Alexandroupolis through the overland pipeline.
"If everything goes according to plan, I think we will have the Bourgas-Alexandroupolis pipeline in operation by the end of 2008," Salagoudis said.
The decade-old Bourgas-Alexandroupolis project is in competition with another pipeline project joining Bulgaria's Black Sea port via Macedonia with Albania's Adriatic coast, which is backed by the US consortium AMBO.
That 912-km Bourgas-Vlore pipeline would cost $1.2 billion (about a billion euro) and will have a capacity of 35 million tons of oil a year. AMBO has said it could build it in four years.
Bulgaria is equally interested in participating in the construction of both pipelines, Tserovski said when he signed the Bourgas-Alexandroupolis deal in April.
"There is enough oil for the two pipelines and they will both be profitable because of the constantly growing environmental demands in the straits of Turkey," Tserovski said.
Turkey argues that the oil companies would have to spend more anyway because of delays in transit through the straits. So far, Turkey has used the straits as an instrument of pressure on Russia, introducing limits on the transit of tankers from Novorossiisk.
The construction of the new pipe, bypassing the Bosphorus, will force Ankara and several other parties to make concessions. The Bourgas-Alexandroupolis pipeline will provide an additional trump card for the Russian government's oil and gas talks with Ukraine.
Russia exports about a third of its oil production through the Black Sea and the pipeline will allow it to bypass the crowded and dangerous Bosphorus in Turkey, minimising delays and potential environmental disasters.
According to a study commissioned by the governments of Bulgaria, Russia, and Greece, more than 110 million tons of oil were shipped through the Bosphorus in 2004 and delays added about $7 to every metric ton shipped through the strait - meaning a total cost to oil companies of about $700 million.
Excerpts from the report, published in April in the Athens daily Kathimerini, said the oil was delayed by an average of eight days in 2004 while it waited to transit the Bosphorus.
Bourgas-Alexandroupolis will have a capacity of 700 000 barrels a day. The planned annual capacity will be 16.5 tons once the first stage of construction is completed, 26.4 tons after completion of the second stage, and 35 million on final completion with an option to expand this to 55 million tons.
It will be able to handle exports from oil-rich Azerbaijan via a Russian pipeline linking the Caspian and Black seas. It would also allow oil from Kazakhstan to be shipped to Bourgas.
Source: Ivan Vatahov,, Mon 06 Jun 2005

All you ever wanted to know about Paris Latsis
---WE'VE ALL been inundated with Too Much Information about Paris Hilton, but what do we really know about her fiance?
Paris says "He's hot."
And his name is also Paris.
Admit it, you're curious.
Here's what the Star, the London Independent and Tattle think you should know about Paris Latsis, soon to be Mr. Paris Hilton - assuming neither Paris changes his/her mind:
At the time of his death in 2003, he was worth approximately $7.5 billion. And that is real money even if you're Paris Hilton.
Good move.
When the Parises aren't on board, you can rent the Paris. Only $400,000 a week - slightly more than your shore house.
By Howard Gensler
Source:, Posted on Thu, Jun. 09, 2005